KEY TAKEAWAYS:
•Cost accounting is used internally by management in order to make fully informed business decisions.
•Unlike financial accounting, which provides information to external financial statement users, cost accounting is not required to adhere to set standards and can be flexible to meet the needs of management.
•Cost accounting considers all input costs associated with production, including both variable and fixed costs.
•Types of cost accounting include standard costing, activity-based costing, lean accounting, and marginal costing.
Understanding Cost Accounting;
Cost accounting is used by a company's internal management team to identify all variable and fixed costs associated with the production process. It will first measure and record these costs individually, then compare input costs to output results to aid in measuring financial performance and making future business decisions.
Types of cost:
Fixed Cost
Variable Cost
Operating Cost
Direct Cost
Indirect Cost
